Employee Benefits: Thrift Savings Plan

The Thrift Savings Plan (TSP) is a defined contribution plan similar to the 401K plans offered in the private sector or traditional IRA plans. Employees contribute to the TSP by payroll deduction. Both the money that is contributed and the interest earned in a TSP account are tax-deferred. The maximum yearly employee contribution to any tax-deferred retirement savings plan is limited by the IRS. The 2013 IRS contribution limit is $17,500.

Employees under the Federal Employees Retirement System (FERS) are eligible to contribute up to the yearly amount limited by IRS. The employer, through a matching program, may contribute up to 5 percent of basic pay to the employee's account. There is no longer a waiting period when you are hired to receive agency matching contributions.

Employees under the Civil Service Retirement System (CSRS) or CSRS Offset are eligible to contribute up to the yearly amount limited by IRS, but are not eligible for any matching funds.

Employees are immediately vested in the TSP for their own contributions plus earnings, and for any Government match plus earnings. FERS employees are vested in an automatic 1 percent contribution made by the Agency after 3 years.

Employees over age 50 are eligible to make additional TSP Catch-up contributions provided they contribute the maximum IRS contribution limit to the TSP, traditional IRA, and/or eligible tax-deferred employer plan during the course of the year. TSP Catch-up contributions also have an annual maximum amount limited by the IRS. The 2013 maximum TSP Catch-up contribution amount is $5,500. There are no employer matching contributions on catch-up contributions.

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